Tag: digital banking

The reason why your bank’s SMS alerts no longer include account balance

In a bid to fortify the safety and security of digital banking experiences, banks in Pakistan have recently implemented a crucial update, removing customers’ account balance information from SMS alerts.

This proactive move aims to safeguard users’ privacy and protect their sensitive financial details.

Previously, users would receive SMS alerts from their banks, displaying their account balance whenever they made transactions or received funds from other accounts. However, this service has now been discontinued, prompting mixed reactions from the public.

While some Pakistanis express reservations about this security update, it is essential to understand that the decision was made to enhance user privacy. To access their account balance conveniently, customers can now log into their respective bank’s mobile application.

The update aligns with the recommendations of the State Bank of Pakistan (SBP), as outlined in the central bank’s BPRD Circular No. 04 of 2023. This security enhancement has been uniformly implemented across the entire banking industry in Pakistan.

The move comes in response to the rising trend of fraud and mobile banking scams, necessitating measures to protect account privacy, especially in public spaces.

With SMS notifications often visible on lock screens, the removal of account balances adds an extra layer of security, ensuring sensitive financial information remains confidential.

The State Bank of Pakistan (SBP) has consistently advised banks and microfinance banks (MFBs) to implement appropriate controls and remedial measures to enhance the security of digital banking products and services. As the digital landscape continues to evolve rapidly, these measures become crucial in mitigating the risk of fraudulent activities.

The adoption of digitization has significantly transformed the financial landscape, allowing banks and MFBs to cater to the growing needs of customers.

However, the State Bank of Pakistan emphasises the importance of supplementing digitization with necessary controls to effectively counter the risk of fraudulent activities and maintain the integrity of digital banking products and services.

January 6, 2024
1.5% transaction fee for debit and credit cards abolished by SBP

The mandatory minimum fee of 1.5 per cent that banks were required to charge merchants on financial transactions made with debit and credit cards has been eliminated by the State Bank of Pakistan (SBP), and financial institutions are now permitted to charge even less than that amount to encourage the use of digital banking.

According to a notification released on Friday, the central bank has kept the fee’s upper ceiling at 2.5 per cent.

Also, the SBP mandated that all online merchants and payment recipients in Pakistan begin taking card payments no later than June 30, 2023.

Before, petrol outlets stopped taking payments made with debit and credit cards and asked that the 1.5 per cent fee be eliminated.

The elimination of the minimal fee has long been demanded.

Eliminating the minimal fee is a good thing for digital transactions, according to experts. The State Bank’s plan to boost the use of digital cards includes this, as this decision would also improve the documentation of the economy and help decrease cash-based transactions.

Across the nation, there are about 45 million debit and credit cards. Nonetheless, the majority of cardholders use their cards to make ATM withdrawals. Just 5–10 per cent of POS users utilise cards.

March 21, 2023
SBP instructs banks to inform customers in advance about downtime of digital banking services

The use of banking apps and sites for carrying out day-to-day transactions has considerably increased. However, it has been noted that in cases of service outages, customers are not properly informed in a timely manner, due to which they face issues with transactions.

Now, in order to ensure that customers are informed about service disruptions due to any scheduled or unforeseen activity, the State Bank of Pakistan (SBP) has issued fresh instructions to facilitate the customers of the financial institutions.

According to the most recent instructions, banks must now notify customers and the SBP of any planned activity that may result in service disruptions.

Financial institutions are required to inform customers at least two days in advance through SMS alerts, social media platforms, and in-app notifications, while SBP will be notified at least one week in advance for any maintenance activity.

SBP, as part of its oversight responsibility, will regularly monitor the availability of digital channels itself.

Monthly cumulative downtimes must be reported to SBP. The central banks shall be apprised of the actions taken by the relevant bank to avoid inconvenience in the future if the unforeseen outage exceeds three hours each quarter.

January 12, 2023
NADRA introduces a new digital payment system to replace ATMs

The National Database and Registration Authority (NADRA) has introduced an innovative system that will serve as an alternative to automated teller machines (ATMs) and let citizens pay utility bills and identity documents.

This development comes as a result of NADRA’s partnership with 1Link, Pakistan’s largest and fully licensed payment gateway system. The two authorities have formed a strategic alliance to evolve and administer an e-payment system that will build on NADRA’s already existing e-Sahulat franchise.

According to DAWN, the collaboration will make it possible for the more than 17,000 e-Sahulat centers to conduct financial transfers, cash-in and cash-out transactions, as well as P2G, G2P, and P2P payments.

NADRA Chairman Tariq Malik and 1Link CEO Najeeb Agrawal inked the agreement on Monday at the organization’s headquarters. In response to this development, Malik stated that NADRA has been trying to enhance e-governance by empowering organisations from the public and commercial sectors through its digital services.

He asserted that one of Pakistan’s most cutting-edge digital services for financial payments is NADRA’s e-Sahulat facility.

Through this cooperation, the more than 17,000 e-Sahulat locations operated by NADRA will be able to quadruple the capacity of more than 16,500 1Link ATMs nationwide. As was already mentioned, this will make it simple for consumers to deposit and withdraw money.

In the future, the digital platform will also be accessible in rural Pakistan, enabling students there to continue their studies while earning money to cover their tuition.

September 10, 2022